« previous next »

Author Question: How does competition ensure that the efficient product mix is attained? What will be an ideal ... (Read 31 times)

mspears3

  • Hero Member
  • *****
  • Posts: 586
on: Jul 1, 2018
How does competition ensure that the efficient product mix is attained?
 
  What will be an ideal response?

Question 2

The long-run average cost curve may initially slope downward due to
 
  A) decreasing average fixed costs.
  B) increasing marginal returns.
  C) economies of scale.
  D) All of the above.
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


canderson530

  • Sr. Member
  • ****
  • Posts: 317
Reply #1 on: Jul 1, 2018
Answer to Question 1

In a competitive market, producers choose an output level where marginal cost equals price. Thus, Px/Py = MCx/MCy. Each consumer maximizes her own utility subject to the given prices by setting MUx/MUy = px/py. Even though each is acting independently and in her own interest, the final outcome is that px/py = MRS = MRT, which is the condition for efficient product mix.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

Did you know?

Human stomach acid is strong enough to dissolve small pieces of metal such as razor blades or staples.

Did you know?

Though the United States has largely rejected the metric system, it is used for currency, as in 100 pennies = 1 dollar. Previously, the British currency system was used, with measurements such as 12 pence to the shilling, and 20 shillings to the pound.

Did you know?

Patients who cannot swallow may receive nutrition via a parenteral route—usually, a catheter is inserted through the chest into a large vein going into the heart.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Ginkgo Biloba label. The label indicates the product is standardized to percentages of the two ... Ginkgo Biloba label. The label indicates the product is standardized to percentages of the two ...
Modern commercial fishing is highly efficient Modern commercial fishing is highly efficient
Importance of Considering Gestalt Principles in Product Design (1 of 2) Importance of Considering Gestalt Principles in Product Design (1 of 2)
Use the product rule to find derivative Use the product rule to find derivative
To find the derivative use product rule To find the derivative use product rule
Insect PollinationHoneybees are efficient pollinators of a variety of flowers, including those of be Insect PollinationHoneybees are efficient pollinators of a variety of flowers, including those of be
Video: Isovolumetric VC, Ventricular ejection, Isovolumetric & Passive ventricular filling

For a complete list of videos, visit our video library